Financial Literacy - Families and Finances
Ruth Nemzoff
smart spending
Family relationships make life rich

q_v2.gifDo you think boomerang children should be required to share basic household expenses? After all, wouldn't it be detrimental if the child believed he or she was getting a free ride?

a_v2.gifIn certain families, that's absolutely true. Again, it depends on the circumstances. If the parents are wealthy and have lots of disposable income, they might prefer services rather than money. Services are as valuable. For example, if you pay a gardener $4,000 a year, show them the bill. You can tell them that if they live at home, "I'm going to hire you instead of Joe the gardener." That's something you can actually quantify. In some families, parents accept rent but put it in a special bank account. They're actually doing forced savings and not telling the child. It's very dependent on the child and parental attitude, but yes, there has to be some responsibility.

q_v2.gifShould adult children who live at home start saving for long-term goals like retirement?

a_v2.gifCertainly, young people need to start thinking about retirement at a young age. There's a whole financial literacy piece that we need to teach our kids because part of financial literacy to me is thinking about the long term in your life. In addition, because of the economy, the parents may need to collect rent because they need it for their retirement. But, I do believe we need to talk with our kids about retirement. They need to know what the options are and understand the trade-offs.

q_v2.gifShould parents establish a time frame for how long boomerang kids can live at home?

a_v2.gifIt depends on the situation. In this economy, it may be difficult to find jobs, so instead of setting dates for leaving, set expectations. For example, tell them as long as they are actively looking for a job, or as long as they are going to school or saving for a down payment, they can stay. These expectations are a negotiation that starts with the question: What do you think an appropriate time frame might be to stay with us? And what do you think would be fair for us to expect? Then negotiate from there.

q_v2.gifWhat is the best way to handle money requests from adult children, and when is it OK to say no?

a_v2.gifIn many families, if the child is doing everything that is responsible and still is not finding a job or getting into school but is volunteering in order to build his/her resume, you may want to say yes to requests. While each family has its own views of what constitutes a good faith effort and what is appropriate preparation for adulthood, it's important to listen to the views of other families -- and to those of our children -- in order to understand the many perspectives of how one crafts a life.

If the child has a salary, certainly they should pay all their own expenses. Part of being an adult is making value judgments about money. Adults differ on what they value, but parents can suggest and share their experiences (and their regrets) as well as their wise decisions. Parents might even learn something from their children's perspectives.

q_v2.gifHow difficult was it to juggle family responsibilities while you were working as a college professor and state legislator?

a_v2.gifIt was always difficult to juggle family and work. I was fortunate that my husband earned a good living. Even so, combining work and family is very stressful, and that is why whatever support the generations can give to each other is so important. We need each other for birth, for death and for all the crises in between. Having relationships with parents in which they are willing to help out in stressful times is important. Parents are more likely to help if they feel loved and appreciated and are given some leeway to follow their instincts.

q_v2.gifUnder what conditions is it better for aging parents to live with adult children rather than be placed in a special care facility?

a_v2.gifAgain, it depends on the family. In many foreign cultures and some American cultures, the expectation is that parents will live with adult children. Finances and community resources all play into this decision, as do personalities of the generations. There really are no rules.

q_v2.gifWhy do you think Americans are so cool to the idea of intergenerational households?

a_v2.gifOne thing that makes an intergenerational household work is when the rules are clear. In most societies where there is an intergenerational household, the kids follow the parents' rules. We're a society that is much more into independence and generally don't want to give that up to follow someone else's rules.

If you are looking for perfection and a smooth ride, do not live together. If you are looking for love and emotional richness, you might find it in an intergenerational family.


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